Sell in May and go away has been a well observed seasonal trend tracked by the Stock Trader’s Almanac since 1950. It makes complete sense why it occurs in regards to lower trading volumes during the summer and increased investment flows during the winter months.
If you have been reading our blogs it is hard to misinterpret our bearish inclination. I have never had a problem being bullish or bearish when the market conditions dictate, but we want to clarify our position. The way we view the markets is focused around economic and credit cycles. These cycles drive the markets higher and lower. Throughout history, there has never been a market advance that did not end with a corrective move. Every trough-to-peak market advance is followed by a peak-to-trough correction. This sequence of cycles higher and lower creates a mean price level through the middle of the cycles. The market has never failed to revert back to the mean.